The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Customs’ “excesses” are still imposing a “stranglehold” on business in Freeport, a top QC warned yesterday, despite the Government’s revenue agency dropping previous demands and impositions.

Fred Smith QC, the Callenders & Co attorney partner, said that despite the Government seemingly dropping the requirement that all Grand Bahama Port Authority (GBPA) licensees prove they were up-to-date with National Insurance Board (NIB) contributions in return for the renewal of their annual ‘bond’ letter, Customs was continuing to demand “all kinds” of restrictions.

Speaking to Tribune Business after the Court of Appeal adjourned his case over the NIB ‘good-standing’ letter to June 11, Mr Smith said: “I understand that there are many licensees who, up to this date, are still having to fight with Customs about getting their bond letter.

“Customs is demanding all kinds of different conditions depending on the situation, and controlling what licensees can and can’t get under the bond.”

Freeport’s ‘bonded’ economy is vital to the city’s commercial and business infrastructure. The ‘bond’ letters allow GBPA licensees to import goods, either for use in their own business or sale to other licensees, without paying the normal up front Customs duties.

And, in the case of goods sold to individuals, families and ordinary consumers, GBPA licensees remit the correct duty sum post-paid to Customs.

The ‘bonded’ economy has been estimated as generating $200-$300 million in annual economic activity, and Mr Smith launched a 2011 Judicial Review action on behalf of three companies he owns (or part-owns) - Callender’s, Smith’s Point and Bahamian Outdoor Adventure Tours - over Customs’ demand that GBPA licensees provide an NIB ‘good-standing’ letter before their bond letters were renewed.

However, Justice Estelle Gray-Evans last March dismissed the companies’ application for permission to launch the Judicial Review action.

She did this on the grounds that the Government’s decision to cease the NIB letter demand had made the action ‘moot’.

However, Mr Smith told Tribune Business yesterday: “Even though the Supreme Court said our case was moot, Customs’ excesses are going on as they have been for 40 years.

“It’s a stranglehold on business. It chokes business, chokes Freeport. Customs in Freeport chokes free enterprise.”

Mr Smith had argued that it was essential to continue with the Judicial Review action, on the grounds that a court ruling was necessary to prevent Customs reverting back to its previous impositions.

However, his bid to overturn Justice Gray-Evans’ ruling will have to wait several weeks. The Attorney General’s Office did not provide its written submissions until yesterday morning and the Court of Appeal, wanting to hear its side, pushed the hearing back until next month.

In his written submissions to the Court of Appeal, Mr Smith alleged that the ‘NIB letter’ was a compliance measure “dreamed up” by Customs which had “no basis in law”.

“This requirement was, to say liberally, dreamed up by the [Customs] Comptroller and the National Insurance Board as an operational measure with the aim of increasing compliance among businesses with the requirements of National Insurance,” Mr Smith alleged.

“However, although the aim might be in principle laudable, the requirement had no basis in law. The requirement was also particularly invidious as the Comptroller would withhold the Over-the-Counter ‘bond’ letter in circumstances where the National Insurance Board was merely investigating whether or not a licensee was in good standing.

“This had the effect – no doubt unintended, but nonetheless real – that a licensee could be ‘punished’ by the Comptroller simply for being under investigation by the National Insurance Board, even where no wrongdoing had occurred.”

Mr Smith added that Bahamian Outdoor Adventure Tours was impacted by the latter situation, and was left without a ‘bonded letter’ for the whole of 2011.

“It is worth noting that no progress has been made towards establishing any such meetings with the Comptroller or the Ministry of Finance to discuss these wider issues in the two years between these proceedings first being issued and this appeal,” Mr Smith alleged.

Setting out his grounds for appeal, Mr Smith said the judge was wrong to determine that the issue became ‘moot’ with the Government withdrawing the ‘NIB letter’ as a condition for ‘bond letter’ renewal.

Referring to the Government’s communication on the matter, Mr Smith alleged: “It is clear from this letter that the Comptroller did not acknowledge that the decision was unlawful.

“On the contrary, it was expressly stated that the acts of the Comptroller could not be regarded as any admission.

“In the premises, it appears that the Comptroller simply decided not to give effect to a power which he believed he was entitled to give effect to. His position to impose such conditions in future was, however, expressly preserved.”

Mr Smith also alleged that it would have been “in the public interest” to hear his companies’ Judicial Review application because the issue affected “thousands of Port Authority Licensees directly”.